State disputes findings on Flying J project

Dec. 19, 2013

Written by

Walter F. Roche Jr.

The Tennessean

A federal audit report is recommending that the state of Tennessee be required to refund more than $1.6 million from a $2 million U.S. Environmental Protection Agency stimulus grant that helped finance an electrification project at a Pilot Flying J truck stop.

The report from the EPA’s Office of Inspector General charges that Tennessee overestimated the benefits of the truck stop projects and failed to fully comply with a requirement that materials used were manufactured in the United States.

The grant money was used to install electric heating and cooling units at four truck stops so that truckers would not leave their engines idling and generating pollution. The heating and cooling units are connected to the trucks through the windows.

One of the truck stop installations singled out in the audit is a Pilot Flying J facility in Jefferson County. The auditors said the records do not include required certification by the contractor that requirements were met to buy American products. Another truck stop in Dandridge, the audit noted, was outfitted with 30 heating and cooling units but was open for only three months before it was shut down when the operator went bankrupt.

The Mountain Plaza Truck Stop has changed ownership, but remains boarded up and idle.

Wrong assumption

State officials in a six-page response to the EPA OIG said they had assumed that the “Buy American” provisions in the stimulus grant program did not apply to the projects and that the EPA itself concurred in that opinion.

In the letter a state official wrote, “DOT was surprised and deeply disappointed at the arbitrary and capricious nature of the OIG recommendations” and labeled the proposed penalty “harsh and unjust.”

TDOT spokesman B.J. Doughty said that so far the state has not paid back any of the money and that it will be up to EPA to decide whether to follow the OIG recommendations. EPA officials did not respond to a request for comment.

The OIG’s report acknowledged that EPA agreed with state officials that the “Buy American” provision did not apply to the electrification projects, but concluded both were wrong.

In a separate finding, the OIG report also criticizes the state for overestimating the pollution reductions that would result from the electrification project. Data collected thus far show that the use of the units remains far below original estimates.

The audit shows that overall usage turned out to be only 3.7 percent of the amount state officials had estimated. At one location the percentage used totaled only 0.3 percent of the TDOT estimate.

A fitful start

As the federal audit notes, the state effort to award contracts for the electrification project got off to a fitful start. There were no responses to one solicitation, and the state then got permission to accept bids from the suppliers of the electrification units.

After EPA approved the change, TDOT awarded a contract to Convoy Solutions for the Pilot truck stop in Jefferson County. A Pilot spokeswoman said the project benefited Pilot’s customers but not the truck stop chain itself.

“Pilot Flying J does lease a portion of its property located at 3624 Roy Messer Highway, White Pine, Tenn., to Convoy Solutions,” the spokeswoman wrote, adding, “Pilot Flying J was not involved with the equipment installation and does not own or operate any equipment that belongs to Convoy Solutions. Pilot Flying J does require Convoy Solutions to follow all federal, state and local regulations.”

The contract was awarded to Mountain Plaza despite the fact that its owner, Rick Lewis, had been convicted in 2002 of 31 counts of theft for filing false sales tax returns. And after the award, in early 2012, Lewis pleaded guilty to writing nearly $200,000 in worthless checks.